The transformation of the Russian defence industry

Abstract

TRADITIONALLY, THE DEFENCE INDUSTRY constituted the most powerful industrial lobby in the USSR, with an administrative structure at all the organisational levels where its interests could be affected. With a hierarchical and pyramidal structure, the different entities of the sector remained isolated from strictly civilian bodies. The strategic part it played within the organisation of the Soviet Union enabled the defence industry to manage a growing and important volume of resources; on the one hand, it had a special supply system which guaranteed regular high-quality provision of the most advanced technology in the country, as well as highly qualified human resources. On the other hand, the sector imposed the production of armaments upon the rest of society as a social necessity justified by the importance of national security. The disintegration of the Soviet Union changed the situation dramatically. Initially, the new reforms were not considered to affect the defence industry but today's reality proves the opposite, and during the three years of transition towards a market economy the face of the defence industry has substantially changed. This article offers a review of the most outstanding events which have taken place in the Russian defence industry during the first years of the transition, with the objective of determining its likely future. The changes can be analysed from different points of view, but two major perspectives clearly stand out: organisational and production changes. As to organisational changes, we focus on the new structures (privatisation, centralisation and decentralisation processes), which are closely related to the current reforms. Regarding the production changes, we shall show the deep shifts in the composition and levels of activity of the industry, concentrating on the conversion process and amplifying this with a description of recent trends in both military and civil production.